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When Yi Zhang opened restaurant and karaoke room Lark and Owl in August 2019, he wanted to bring authentic Chinese breakfast food and a fun late-night experience to Iowa City. Now, Zhang is selling the business for $1.
Lark and Owl, at 221 S Gilbert St., is one of two restaurants Zhang owns and operates. The other is JiangHu Asian Street Food.
Lark and Owl had a receptive opening, but was able to operate fully only for around seven months before the COVID-19 pandemic closed restaurants' doors.
Zhang spent $95,000 acquiring and remodeling the space.
Zhang said profits relied heavily on the karaoke room and, with sales declining 60 percent to 70 percent from the opening, food deliveries and pickup haven't been able to bridge the gap.
He hasn't felt comfortable opening up dining in the small restaurant.
With $5,000 monthly rent, payroll, other expenses and an empty karaoke room, Yi said the restaurant hasn't made a profit since the pandemic began.
'What we're trying to do is give the place for free to just make sure we are not bleeding money,” Yi said.
Lark and Owl isn't the only casualty of the COVID-19 pandemic in downtown Iowa City. Restaurants such as The Mill and the Saloon have closed their doors and others have changed processes drastically to stay open.
Around four parties have expressed interest in buying the restaurant, but Zhang said they've noted concerns about being able to pay the high rent and make money as the pandemic continues to keep sales low.
He understands their worries. JiangHu Asian Street Food, which Yi opened in 2018, also struggled when the pandemic began, but received a lot of community support and from social media, driving up sales and allowing them to regularly break even.
The decision behind selling Lark and Owl comes down to more than just money. Zhang has been working 15-plus-hour days to keep both restaurants running, and said it's been exhausting work.
He has tried to apply for loans and other federal government funds with little luck.
Zhang did receive some funds from the Paycheck Protection Program, but he said the fact that he is not a full American citizen has barred him from receiving other loans. He is applying for funds in the latest round of state COVID-19 relief grants, as applications opened up Feb. 1.
'This money would only keep us open another two, three months,” Yi said. 'It's not really solving things.”
Zhang came to Iowa in 2014 from the Shanxi Province, which he described as the 'Midwest of China.” He was studying at the University of Iowa when his family had financial troubles, forcing him to drop out of school and find work.
Zhang's landlord hired him to help with maintenance and other jobs, and eventually with the help of loans from friends and banks, he was able to open JiangHu Asian Street Food.
His goal in opening the restaurants was to bring an aspect of daily life in China, eating traditional food, to his new home. Zhang said he loves explaining dishes to customers, and enjoys building bridges between his two cultures.
Even if Zhang gets Lark and Owl sold, it's not a guarantee that JiangHu Asian Street Food will continue to do well as the pandemic remains.
By letting one business go, he's just hoping to keep his other afloat.
'It's definitely not so good but it is what it is,” Zhang said. 'There's not many things we can do.”
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